Dubai's mortgage firm Amlak posts $55.5 mln Q4 loss
DUBAI May 11 (Reuters) - Dubai-based Islamic mortgage company Amlak Finance AMLK.DU posted a loss of 204 million dirhams ($55.5 million) in the fourth quarter mainly due to a sharp fall in real estate investments income.
Amlak, earmarked for a possible merger with its rival Tamweel TAML.DU, reported a decline in 2008 earning to 241 million dirhams from 301 million in 2007. It posted a net income of 126 million dirhams in the fourth quarter of 2008.
The drop stemmed mainly from "the sharp fall in income from real estate investment activities, lower new mortgage originations, significant increase in funding costs, higher general provisions on mortgage portfolio and other investments," it said in a statement on Monday.
"Although new financing is likely to remain tight over the next few months, we are adamant on service quality and support to our existing customers," Chief Executive Arif al-Harami said in the statement.
Shares of Tamweel and Amlak Finance have been suspended since late last year as the government decides the fate of the two firms, which could be merged to help them cope with the financial crisis and property slump in Dubai.
Tamweel's chairman said last month a decision on how to restructure Islamic mortgage firms Amlak and Tamweel would be made in "weeks" with the federal government pumping money into the firms. (For Reuters content on Islamic finance, click on ISLAMIC) ($1=3.673 dirhams) (Editing by Leslie Gevirtz)
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